Kuwait’s demographic predicament needs skills, not speed

Gradual and systematic steps are needed to address Kuwait's demographic challenges

An aerial view shows Kuwait City and the National Assembly Building (Kuwait Parliament), Kuwait, March 20, 2020.
REUTERS
An aerial view shows Kuwait City and the National Assembly Building (Kuwait Parliament), Kuwait, March 20, 2020.

Kuwait’s demographic predicament needs skills, not speed

Kuwait City: Kuwait is a small country of only 17,000 square kilometres and no more than 4.4 million people. Its population has grown rapidly since the early 1950s, which is a relatively brief period in demographics. The problems it faces with its dependence on foreign labour will take some time to solve.

Times have changed since the 1957 census,when the population stood at 206,000 people, of whom 55%, or 114,000 people, were indigenous. Kuwaiti nationals represent 34% of the country’s total population of approximately 4.5 million as of 30 June 2022, according to official data.

Pre-oil economy

Before oil changed everything for Kuwaitis, their country developed over a relatively short period of time. The emirate was established in 1757 after emigrants arrived from nearby countries such as Najd, Iraq, and Iran. Its economy was primitive, depending largely on fishing and herding, then on pearl diving.

Soon after, trade with India and East Africa became the country’s main economic activity.

This fostered craftsmanship and various professions, including the manufacture of traditional wooden ships known as booms. Built in various sizes, the vessels were used for pearl diving and to carry out trading.

Wealthy Kuwaitis also bought large palm plantations in southern Basra in Iraq, which became a source of income until the beginning of the oil era in the late 1940s.

Oil-induced transformation

With the discovery of oil, Kuwait achieved substantial sovereign revenues, bringing about an exciting economic transformation, increasing the need for workers and experienced professionals in many emerging economic activities in the early 1950s.

Arabs, Indians, Asians, Iranians, Europeans, and Americans flocked to Kuwait to fill the gaps in the labour market for a host of jobs, including school teachers, doctors, nurses, engineers, and construction workers.

Kuwaiti nationals were not qualified for many of the roles, especially since a significant part of public spending, which was financed by oil revenues, went towards infrastructure projects, schools, and hospitals. Therefore, there was no alternative to relying on expatriate labour.

On this journey of transformation from want to prosperity, subpar living conditions were offset by higher school enrollment rates and better healthcare after years of deadly diseases such as smallpox, measles, and tuberculosis claimed the lives of the young and old in the 1930s and 1940s.

Expats brought professional capacities and sophisticated education from their civilised home countries, contributing to advances in the quality of life in Kuwait.

Expats brought professional capacities and sophisticated education from their civilised home countries, contributing to advances in the quality of life in Kuwait.

The oil age undoubtedly upturned the lives of the Kuwaiti people. In the pre-oil era, Kuwaitis typically worked in trades such as carpentry, blacksmithing, construction and service delivery. But after the expat influx they moved into administrative professions, leadership of government institutions, or management and oversight roles in the private sector.

Soaring population growth

With the improvement of living conditions and healthcare services and the decline in infant mortality, population growth rates began to rise, as did the number of Kuwaitis within the overall population.

Additionally, after the country achieved independence and adopted a constitutional government system in 1962, authorities naturalised large numbers of displaced people from neighbouring regions.

Naturally, the native community frowned upon such policies, which are still controversial even today. This host of factors — increasing expat rates, unregulated naturalisation, and improved living and health conditions — has driven soaring population growth in the past seven decades.

Official statistics show that the population growth rate stood at 10.7% in 1962, gradually declining to 3.7% in 1989 before the Iraqi occupation, then falling to 2.8% in 2019 before the Covid-19 pandemic and the subsequent departure of many expatriates.

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Cleaners wearing facemasks rest at the Kuwait International Airport Terminal 4, on April 3, 2020 amid the coronavirus COVID-19 pandemic crisis

According to the Public Authority for Civic Information (PACI), the expat population is split between many groups, led by Indians (19% of the population), then Egyptians (14%), and then other communities or population groups including Bengalis, Filipinos, Syrians, and others.

Expats undoubtedly constitute a significant slice of populationand a key labour force in the country, amounting to 83% of total employment, according to the same data from the PACI.

Addressing Kuwaiti workforce challenges

Kuwaitis account for only 17% of the total labour force estimated at 2.5 million workers, of whom 483,205 work in the public sector and 1,428,078 in the private sector. Kuwaitis make up 77% of public sector employees and only 5% of the private sector labour force.

With labour surpluses on the rise in government departments and public companies and authorities, the Kuwaiti public sector is a driver of disguised unemployment.

The government earmarks large funds for such employment given the continuous flow of citizens to the labour market annually. But most labour market entrants coming from secondary education are not qualified to work in the private sector given the lack of vocational training in the country.

Moreover, the number of high school graduates, which reached approximately 40,000 last year, is increasing annually. Upon finishing school, most prefer to enroll in universities at home or abroad, regardless of specialisation, market demand, or the level of their institutes or universities of choice.

The government has passed laws designed to boost the percentage of Kuwaitis in the overall population and to encourage private sector companies to employ them.

Law No. 74/2020 on demographic regulation aims to dispense with some expat labour categories, and companies must now meet mandatory conditions for employing Kuwaitis, with the rate determined by sector.

But this law has not yet been implemented, nor have its executive regulations been issued. The government has also tried to drive out expats over the age of 60 with no university degree by changing the conditions and costs of residency renewal.

There are questions surrounding whether laws, regulations and administrative procedures will be able to adjust demographics, especially when there are no local alternatives to fill the shoes of outgoing expats.

There are questions surrounding whether laws, regulations and administrative procedures will be able to adjust demographics, especially when there are no local alternatives to fill the shoes of outgoing expats.

The targets of the legislation — foreign workers over the age of 60 with no university education — work in basic jobs. They have gained most of their professional capabilities and experience in Kuwait, where many of them have been working since the 1960s and 1970s, often accompanied by their families and representing a significant consumer force.

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Workers clean the window panels of a high-rise building in Kuwait City on September 5, 2022

Gradual steps

Fixing the demographic imbalance in the labour market requires rational and gradual steps centred on providing vocational education, upgrading the capabilities of citizens, enhancing employment in the private sector, and providing a different work climate that promotes productivity.

Kuwait is facing a multi-faceted demographic predicament. For one, the sponsorship system in place exacerbates human trafficking and the recruitment of unneeded marginal unskilled labour.

There is also a large reliance on immigrants for workers in domestic services, including nannies and others carrying out a range of duties and on whom many Kuwaiti families depend.

There is also a large reliance on immigrants for workers in domestic services, including nannies and others carrying out a range of duties and on whom many Kuwaiti families depend.

They represent a significant component of the expat labour force, numbering around 700,000 and mostly coming from India, the Philippines, Sri Lanka, and Bangladesh. They represent 27% of the total workforce and 32% of the total expatriate workforce.

Meanwhile, the rate of natural population growth among citizens remains high compared to the present-day global yearly rates of around 2.5%. Fertility rates are also high, ranging from 2 to 2.5 children per woman of normal reproductive age. This rate varies according to the degree of urbanisation and the rate of women's participation in the labour market.

Addressing demographic imbalances in Kuwait cannot be done over a short period of time. It requires systematic and unrushed solutions which must also protect the performance of the economy.

At the same time, it is crucial to address residency laws, abolish the skewed sponsorship system, and adopt a modern educational system that helps upgrade national capabilities.

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